Lynas linked to rare earths mega-merger as price falls bite - AFR, page-16

Just some quick numbers here. But, assuming no immediate growth in LYC quarterly profits for 2024, and further assuming break even to moderate return to profitable numbers for MP, the USA market (and assuming a US listing on the NYSE or NASDAQ) could translate into a 26 P/E multiple for the merged entity, as American stocks fetch a higher P/E if viewed as growth stocks.

Using this simple assumption, or aggregated EBITD(A), and separating out amortization (as I would need to look much closer at MPs book value), of US$580 MM per year, a typical US investor would likely value the merged entity at US$16.5 Billion or US$14.00 per share, or AU$17.70 a share based on the current stock floats of the two companies, including immediate cost efficiencies and other assumptions. Along with government blessings from the Departments of Energy and Defense, along with contracts signed (MP and GM, for example), those share prices could be 95% realistic. It's truly in Americans' appetite for growth stocks, which give the big pay day!

MP closed up 6.20% on the trading day, with a P/E of 30.1. LYC closed out in Sydney with a P/E of 17.3.

Unfortunately, most of us don't like the MP business model very much, but when you combine both together, MP goes from being downright ugly to a mere homely appeal. Certainly not fetching, but clearly more attractive. One thing for sure. RE oxide production on three continents is a real eye opener.